NDA, PPA or both

When trying to license your idea to a company and you have a PPA, is your PPA enough protection, or should you also use a NDA ??

Bill Goldblatt

Subject: Re: NDA, PPA or both Wed Sep 02, 2009 3:58 pm

ali wrote:

When trying to license your idea to a company and you have a PPA, is your PPA enough protection, or should you also use a NDA ??

It depends on the situation and potentially how much you are willing to risk. If the PPA was professionally prepared, you can probably go ahead. Sure, if they copy your idea, and are infringing what would be your claims, you can't sue until your patent issues (and damages can only, potentially, be collected pursuant to the date your non provisional application was published). And, maybe they try and devise ways they can work around what you have.

But, a PPA doesn't need to include claims, and you can always change and add claims (where the content of the PPAs enables that), so they won't know what your claims will be. And, more importantly, if a company is really interested in what you have, it is much easier for them to offer a licensing agreement than it is try and work around you and/or cut you out of your share. And besides, if you will have truly meaningful protection, you can arguably benefit if they go ahead and run with your idea, as they will be using their resources to build up a market for your product and then once your patent issues they are dependent on your cooperation. It gives you leverage in negotiating a licensing agreement, and if it comes down to litigation, if you can't fund it an investor or one of the company's competitors probably could.

Of course, some would rather prevent themselves from having to deal with infringement.

If you do not have faith in your PPA, requiring an NDA is usually smart. If your PPA will not live up to scrutiny in court, aside from other potential concerns, public disclosure will make you ineligible for foreign patent protection and will get the 12 month grace period clock ticking in the US.